As a pizzeria owner or manager, what should you do if you catch an employee stealing? Your first instinct may be to fire the employee on the spot. You should stop and think, however, before doing this. Analyze each situation individually. Was the employee stealing cash or goods or offering improper discounts? Is the person an otherwise good employee that you would rather rehabilitate than fire? Are you planning to report the matter to the police?

Investigate suspected theft as you would any potential workplace misconduct, such as harassment, retaliation or other breach of policy. Be objective, fair and reasonable. Ask questions of the person suspected of wrongdoing; review available documents, emails or videotapes; and reach a fact-based conclusion. Talk to employees who may have witnessed the alleged theft. Don’t make assumptions about what took place before finding out the facts. Document the entire process from start to finish.

Consider the impact on the workplace prior to taking action. If you opt to discipline or fire an employee, it should be done privately and out of earshot of other employees. It may be tempting to “make an example” of someone but, most of the time, doing that serves mainly to anger the person you’re making an example of and make other employees feel threatened. Whatever disciplinary steps are taken should be documented in the employee’s personnel file. Whether to report the matter to the police is discretionary.

Finally, you might assume that you can deduct the cost of the stolen goods from the employee’s final paycheck but, in many states, this would be a violation of wage and hour laws. Before making any deduction in an employee’s pay (whether you are keeping him employed or not), be sure to consult with your local employment law attorney. Even if the employee agrees to pay back the amount stolen, there are limits on how much pay can be garnished each week. Generally speaking, though, the employer is obligated to pay all wages earned and due to the employee, even if the employee has been caught stealing. If the employee is going to pay back the employer, this should be done in a transaction that is separate from payroll.

Employee theft has been a problem as long as there have been employers and employees. By taking steps to improve the work environment and employee morale and by safeguarding cash, inventory and equipment, employers can reduce the impact of employee theft on their bottom line.

Molly McKean and Julie A. Moore are part of Employment Practices Group, a legal and human resources consulting fi rm in Massachusetts and New Hampshire. Visit for more information

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